An agency nurse is a nurse who works through a third-party staffing agency rather than being directly employed by a hospital, clinic, or other healthcare facility. These nurses fill temporary staffing gaps on a contractual or per-shift basis, providing the same clinical care as permanent staff nurses but with more flexibility over where, when, and how often they work. The arrangement has grown rapidly in recent years, with the proportion of total hospital hours worked by agency staff increasing by 133% between 2019 and 2022.
How the Staffing Model Works
The relationship involves three parties: the nurse, the staffing agency, and the healthcare facility. A hospital or clinic with an open shift or a short-term vacancy contacts the staffing agency, which matches available nurses to the assignment. The agency handles payroll, taxes, credentialing, and often provides professional liability and workers’ compensation insurance. The facility pays the agency an hourly rate that includes a markup over what the nurse earns, and the agency keeps the difference as revenue.
Most agency nurses are classified as W-2 employees of the staffing agency, not independent contractors. This distinction matters because it means the agency is responsible for labor law compliance, payroll taxes, and insurance coverage. Some platforms use a 1099 independent contractor model instead, but that approach comes with weaker protections: credential verification is often minimal, and the facility itself may be considered the legal employer if it supervises the nurse’s work directly.
Types of Agency Nursing
Agency nursing isn’t a single type of job. It breaks down into a few distinct categories, each with a different lifestyle and pay structure.
Travel nursing is the largest segment, holding about 45% of the market. Travel nurses take short-term contracts, typically 13 weeks, at hospitals across the country. Pay is the highest of any category and often includes housing stipends and bonuses on top of the hourly rate. The trade-off is low job stability and frequent relocation.
Per diem nursing means working on a day-by-day, on-call basis. “Per diem” literally translates to “per day.” These nurses fill in for staff shortages, often with very little advance notice. Per diem work offers the most scheduling flexibility of any nursing role but provides the least predictability. The per diem nursing market sits at roughly $5.2 billion annually.
Local contract nursing falls somewhere in between. Nurses take assignments at facilities within their own area, avoiding the need to relocate. This provides more variety than a permanent staff position without the upheaval of cross-country travel.
Pay Differences Compared to Staff Nurses
Agency nurses consistently earn more per hour than their permanently employed counterparts. Data from the Center for Economic and Policy Research shows the gap clearly. In 2019, permanent staff nurses earned an average of $1,213 per week while travel nurses earned $1,704. By 2022, those figures had shifted to $1,391 for staff nurses and $2,827 for travel nurses. At the peak in January 2022, travel nurse weekly wages were 148% higher than staff nurse wages nationally.
That premium has narrowed somewhat since the pandemic surge. In early 2023, travel nurses averaged $2,657 per week compared to $1,341 for permanent staff. The travel nurse market itself contracted from $18 billion in 2024 to a projected $15.8 billion in 2025, though modest growth is expected to resume in 2026.
Higher hourly pay doesn’t tell the full financial story, though. Agency nurses typically do not receive employer-sponsored health insurance, retirement plans, or paid time off. Purchasing private health insurance can offset a meaningful portion of the pay premium, and gaps between assignments mean periods with no income at all.
Why Hospitals Use Agency Nurses
Hospitals turn to agency staff for several overlapping reasons: high turnover among permanent employees, a limited labor pool, non-competitive pay scales, and sudden spikes in patient volume. Facilities also compete for hourly workers against non-healthcare employers who can more easily raise wages and pass those costs to customers. Agency nurses serve as a buffer against all of these pressures, reducing overtime for regular staff and eliminating the need to create permanent positions for what might be a temporary demand.
The financial scale of this reliance is enormous. Hospital labor costs rose by more than a third between 2019 and 2022, adding an estimated $24 billion in expenses. Agency labor spending as a share of total labor costs jumped by roughly 178% during that same period, with total agency labor expenses surging by nearly 260%.
What the Day-to-Day Looks Like
Walking into a new facility every few weeks or months is the defining experience of agency nursing. Orientation is typically rapid, sometimes just a brief tour of the ward, an introduction to key equipment, and a folder of protocols. Research published in the National Library of Medicine found that permanent staff are generally expected to orient their agency colleagues on top of their existing workload, which high patient loads often make difficult.
Agency nurses are expected to be confident, proactive, and self-directed. Experienced agency nurses develop personal routines to get up to speed quickly: arriving early to walk the unit before their shift starts, observing how permanent staff handle workflows, and independently reading up on facility-specific procedures. Many do this deliberately to avoid being perceived as a burden on an already-stretched team. Even so, the research noted that expectations placed on agency nurses can be “partially unrealistic,” with experienced nurses reporting that they still felt insecure when entering unfamiliar specialties and would have benefited from more structured guidance.
The social dynamics can be tricky too. Agency nurses constantly adapt to new teams, communication styles, and institutional cultures. Some nurses find this variety energizing. Others find the lack of continuity isolating, particularly over long stretches.
Requirements to Get Started
You need an active nursing license (RN or LPN depending on the role) and most agencies strongly prefer at least six months of professional clinical experience before placing you. In practice, many travel nursing agencies look for one to two years because the work demands quick adaptation with minimal supervision. The staffing agency handles credential verification, which for W-2 agencies includes thorough background checks, license validation, and skills documentation in line with standards set by accrediting bodies like the Joint Commission.
The Core Trade-Offs
Agency nursing offers a clear set of advantages. You control your schedule, choosing when and how much you work. You’re exposed to a wide range of healthcare settings, patient populations, and clinical practices that would take years to encounter in a single facility. And the pay is meaningfully higher on an hourly basis.
The costs are equally real. Unpredictable hours can strain relationships and personal routines. You’re responsible for securing your own health insurance and saving for retirement without employer matching. There’s no paid time off, so every day you don’t work is a day you don’t earn. And because you’re always the new person on the unit, you rarely develop the deep institutional knowledge and team relationships that come with staying in one place. For nurses who value stability and long-term professional roots, those trade-offs may outweigh the financial and flexibility benefits.